The picture is likely to get more complicated when Google Inc., the search-engine company, later this year launches its own e-bookstore, Google Editions. Google says it intends to allow publishers to set their own prices—while reserving the right to discount at its own expense.

Yes, there has been discussion about Google Editions for quite a while. Last August, WSJ quoted a Google spokesperson who said it will “sell online access” to books and that the system “doesn’t provide for download.” blogs.wsj.com

The eBook space is getting very crowded all of a sudden and that usually tends to mean falling prices for consumers, Amazon-Macmillan deal notwithstanding, and a shakeout in the industry.

Unlike Bezos, Jobs didn't see any advantage of selling anything at a loss.

This is one thing I can't fathom - what the freak is the overhead on a digital book that $10 will not cover or make up with volume?

There are one time costs but the ongoing costs once recovered shouldn't be much.

I can understand there are costs in formatting the book in digital format, and then whatever advertising, royalties to author and $ to middleman, uploading to server and maintaining it there and Amazon subsidizing the download connect cost and so on - but with the digital book, you're eliminating printing and then the distribution costs must be far far less than print?

Why lose money at the $10 price point? I can't imagine all these costs would be more than a few $ per book?

Are they considering the so called "loss of a purchase of a print edition" when a digital edition is purchased?

Book publishers are still calling the shots these days. What has happened recently in the music business must terrify them. Lately they have been seen as losing their clout so the Amazon news is an important symbolic victory for them. It's never easy to have such a powerful customer as Bezos and today they are celebrating a rare victory.

Yes, digital books are much cheaper to publish than paper ones. Now that these costs are declining, the squabble is all about who should get the surplus: the author, publisher, or book seller? It's also about price elasticity of demand and perceived value of e-books versus paper books.

The landscape is shifting rapidly and both Jobs and Bezos have rewritten the rules of the road. Google meanwhile is the 400 lb. gorilla in the room.

Both Bezos and Jobs would love to become e-publishers and get rid of the middlemen. But they are not in the business of commissioning works (providing upfront payment to authors) or providing editing services. Both of these are likely to remain core publishing functions for some time to come.

Of course. Just as Amazon sells every other Apple physical product, and most digital ones as well.

I would also expect Jobs to allow a Kindle app for the iPad.

And I would expect the Justice department to actively examine and enforce antitrust laws in this space. When Jobs is quoted in the WSJ as saying the price of an eBook will be the same on an iPad and the Kindle that raises certain questions of collusion and anti-competitive behavior.

... would be interesting if the price is the same or varies according to whether it was purchased using the iPad app (via iTunes perhaps) or if there would be a difference when using the iPad Kindle app.

Self-publishing is a very different model from the normal publishing route. These authors are new or perceived as not having an established market for their works. Such authors are generally eager to establish their reputations, so eager that they have traditionally been willing to front the expenses for "vanity presses". Kindle books priced between 0 and $1 now provide a reasonable platform for much broader distribution of such works while imposing no costs upon the author.

Ultimately Amazon has made an unparalleled investment in warehouses and logistics for delivery of physical goods. Google has made a similar investment in servers and logistics for the speedy delivery of relevant digital information. Apple's forte has traditionally been in developing and selling devices for downloading and displaying digital information. But, like Amazon, it has been migrating more and more into the content business. It will be interesting to see how it all shakes out. Anybody who pretends to know is a fool.